Fortumo touts carrier billing and alternate app stores

Tuesday 26th of February 2013 - 10:03:17 PM

Mobile payment provider Fortumo is getting serious about alternative app stores. Through their email blast entitled “Are all your eggs in one basket?”, Fortumo makes a convincing case why developers need to start thinking about other stores than Google Play. They make an important observation:

Unfortunately, the average user downloads only 40 apps for their phone while Google Play has 700 000 available apps. This makes gaining visibility expensive and user retention tricky due to hundreds or thousands of competing apps. Fighting for attention in Google Play is definitely worth it, but it would also be smart to try out alternative channels where the competition is less tough.

We wholeheartedly support Fortumo in this (surprise, surprise). Of course, being a provider of mobile billing they definitely understand that the predatory practices of Google hurts both developers and their business. A common objection to carrier billing has been the high cost, which can range for 20-40% of the amount, some times even higher. But given that the most common in-app pricing point is $4, with many prices ranging under that, it is not that much more expensive than for instance PayPal:

Let’s say you charge $0.99 for the in-app purchase. In the UK and Germany, this would pay out nearly exactly the same with carrier billing as it would with PayPal, often without expensive cross border fees for retrieving the money. While $4 would be pricier on mobile billing than PayPal, the difference is not huge – and a very key thing to consider is conversion rate. While not all users will have PayPal accounts, any mobile user will be able to pay through their mobile, often through a one-click confirmation. Any shortfall in revenue caused by payment fees in this regards will more than be compensated in the increased conversion rate and volume.